President Trump’s announcement of a 25% tariff on steel and aluminum imports has impacted the cryptocurrency markets, causing temporary declines in Bitcoin and Ether. However, both cryptocurrencies have shown signs of recovery, and the overall market cap has stabilized. The Crypto Fear & Greed Index indicates lingering fears amidst broader trade tensions.
The cryptocurrency markets faced a rough patch as U.S. President Donald Trump declared a new 25% tariff on aluminum and steel imports, igniting tensions in a brewing trade war. According to a February 9 report by the Associated Press, Trump stated that any steel and aluminum entering the United States would incur this hefty tax. Furthermore, he announced plans for reciprocal tariffs against nations that impose import fees on American products, insisting that unequal trade practices would not persist forever.
Initially, this tariff announcement led to a sharp drop in crypto prices, with Bitcoin (BTC) momentarily falling to $94,000 before bouncing back to a robust $97,000, as reported by CoinMarketCap. Ether (ETH) also followed suit, recovering from a low of $2,537 back to $2,645. In total, the crypto market cap witnessed a decline from $3.15 trillion to $3.10 trillion; however, it has since rebounded to $3.13 trillion.
The Crypto Fear & Greed Index, a gauge of market sentiment for Bitcoin and other cryptocurrencies, has been entrenched in fear with an average score of 44 out of 100 over the preceding week. Its latest update on February 10 showed a fear rating of 43, slightly lower than the previous day’s score of 46. Trump has also hinted at potential tariffs targeting various industries, including the EU, superconductors, oil, gas, steel, and copper.
Earlier in February, Trump implemented 25% tariffs on key trading partners like Canada and Mexico, and a 10% tariff on China. This move had previously sent both stock and crypto markets tumbling. With estimates from Bybit co-founder and CEO Ben Zhou, potential liquidations in the market could have reached between $8 billion and $10 billion. Following a temporary halt to the tariffs on Canada and Mexico announced on February 3, the crypto market staged a recovery, showing resilience despite ongoing uncertainties.
In summary, the announcement of tariffs by President Trump sent shockwaves through the cryptocurrency markets, resulting in initial declines for major cryptocurrencies like Bitcoin and Ether. However, a swift recovery has occurred, with Bitcoin leaping back above $97,000, while Ether also regained its footing. Despite ongoing fears reflected in the Crypto Fear & Greed Index, the overall market has demonstrated a capacity to bounce back from adverse news, although uncertainties surrounding future tariffs remain.
Original Source: cointelegraph.com
